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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of Provision for Income Taxes

The components of the Company’s provision for income taxes for the years ended December 31, 2023 and 2022 consist of the following (in thousands):

	Year Ended December 31,
	2023				2022
Current income tax provision:
Federal	$	—			$	—
State		6				1
Foreign - PRC		9,343				5,987
Total current income tax provision	$	9,349			$	5,988
Deferred income tax provision:
Federal	$	—			$	(91	)
State		—				—
Foreign - PRC		(834	)			(799	)
Total deferred income tax provision	$	(834	)		$	(890	)
Total income tax provision	$	8,515			$	5,098

Reconciliation of Federal Statutory Income Tax Rate to Company's Effective Tax Rate

The reconciliation of the federal statutory income tax rate to the Company’s effective tax rate for the years ended December 31, 2023 and 2022 are as follows:

	Year Ended December 31,
	2023		2022
Tax computed at federal statutory rate	21.00%		21.00%
Rate difference due to different jurisdiction	-2.43%		4.31%
Preferential income tax rate for HNTE	3.19%		-10.37%
Non-deductible expense – Operating	-6.28%		33.06%
Non-deductible expense – One-time expense related to the Contributions	-22.16%		0.00%
R&D Super-deduction	1.45%		-12.42%
Valuation allowance change	-4.37%		0.00%
ESOP	-0.55%		21.81%
Other	-0.76%		-2.52%
Effective tax rate	-10.91%		54.87%

Significant Components of the Company's Deferred Tax Assets

Significant components of the Company’s deferred tax assets as of December 31, 2023 and 2022 consist of the following (in thousands):

	Year Ended December 31,
	2023				2022
Deferred tax assets:
Accruals and reserves	$	2,811			$	183
Deferred revenue		39				—
Net operating loss carry forwards		40,669				—
Other equity investments		—				150
Tax credit carry forwards		4,463				—
Fixed and intangible assets		15,332				3,428
Impact from foreign corporations		4,590				—
Capitalized transaction costs		658				414
Lease liabilities		98				—
Deferred income tax assets before valuation allowance		68,660				4,175
Deferred tax liability – ROU assets		(108	)			—
Deferred tax liability – Fixed assets		(84	)			(94	)
Less: valuation allowance		(63,773	)			—
Deferred tax assets, net	$	4,695			$	4,081

Movement of Valuation Allowance

The movements of the valuation allowance are as follows (in thousands):

	2023				2022
Balance at the beginning of the year	$	—			$	—
Changes of valuation allowances		(63,773	)			—
Balance at the end of the year	$	(63,773	)		$	—

Reconciliation of Beginning and Ending Balance of Unrecognized Tax Benefits

A reconciliation of the beginning and ending balance of the unrecognized tax benefits is as follows (in thousands):

Beginning Balance on January 1, 2022	$	—
Increase/(Decrease) of unrecognized tax benefits taken in prior years		—
Increase/(Decrease) of unrecognized tax benefits related to current year		—
Ending Balance on December 31, 2022		—
Increase as a result of the GNI USA Contributions on October 30, 2023		1,833
Increase/(Decrease) of unrecognized tax benefits taken in prior years		—
Increase/(Decrease) of unrecognized tax benefits related to current year		—
Ending Balance on December 31, 2023	$	1,833

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of the change in unrecognized tax benefits.

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Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance.

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